Briefly: “Aging population creates $2.8 trillion fiscal crunch” and more news

Canada’s aging and unhealthy population is about to create a significant liability totalling about $2.8 trillion for all levels of government, according to a new study from the C.D. Howe Institute.

It could play a key role in prolonging the economic recovery, author William B.P. Robson wrote in “The Glacier Grinds Closer: How Demographics Will Change Canada’s Fiscal Landscape.”

Spending patterns for public programs such as healthcare, education, elderly and children’s benefits are causing major strains on the economy. Canadians will divert more of their incomes from other public and private purposes to fund them, according to the study.

An aging population will push government spending in these areas from 17% to 24% of GDP over the next 50 years, the study warns.

The provincial and territorial governments will be stuck with most of the burden, with Eastern and Northern regions suffering the most.

Robson’s study suggests improving fiscal discipline, broadening the tax base, along with introducing policies that will stimulate growth. He also suggests implementing a forward-thinking plan that includes a partial pre-funding of healthcare programs, where those approaching retirement age would pay more to prepare the system for future claims.

You can read the entire report on the C.D. Howe Institute’s website.

– Mihira Lakshman

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Manulife signs deal with Gail Vaz-Oxlade

Manulife has announced an exclusive arrangement with personal finance writer Gail Vaz-Oxlade to provide group retirement plan members with expert advice.

The host of the television series, Til Debt Do Us Part, Vaz-Oxlade’s practical approach has earned her a loyal following.

“We’re really pleased about forming this relationship with Gail,” said Sue Reibel, senior vice-president and general manager of Manulife’s Group Retirement Solutions (GRS). “Gail has broad appeal across Canada because of the common sense she applies to financial planning. She offers something for everyone, so she’ll be an excellent fit with the education we offer for group retirement plan members.”

Canadians are demonstrating a growing demand for financial literacy programs, as planning and saving for retirement becomes a major issue. Provincial and federal governments have also identified this as a priority in the Capital Accumulation Plan (CAP) guidelines.

“Gail is already a trusted presence for many Canadians,” says Mike Collins, vice-president, marketing, Manulife GRS. “Her talent for presenting financial tips in a clear way that most people can apply makes her a very effective source.”

Initially, Vaz-Oxlade will provide articles for member updates and communications along with a series of web-based seminars for plan members. It will evolve into a comprehensive program to include written materials, web presentations and social media communications.

– Mihira Lakshman

(09/30/10)